UK M&A value jumps by 20pc but stays low

TOTAL UK M&A deal value increased by 22 per cent during the last quarter, according to research released yesterday.

Data from the Ernst & Young M&A Tracker also suggests that there were 101 UK M&A transactions completed between April and June this year – a 13 per cent increase on the first quarter.

However deal volumes are still depressed in relative terms with the UK registering its second lowest number of M&A transactions since the start of 2010, according to the figures compiled by Cass Business School.

“The market uncertainty created by the Eurozone crisis has led to many, who may have been considering M&A, to adopt a ‘wait and see’ approach,” said Jon Hughes, UK & Ireland transaction advisory services leader at Ernst & Young.

“Buyers and sellers alike are being far more cautious and for some they are of the view that if they don’t have to sell they will sit on the asset until the landscape across Europe has stabilised.”

“On the positive side, there was an increase in average deal value quarter on quarter, with deal size reaching $285m (£183m), so while the quantity of deals being done is being restrained by market uncertainty, buyers appear willing to push through larger deals.”

International M&A deal volume and the value of these announced deals rose by 10 per cent and 18 per cent respectively in the second quarter.

But the Eurozone M&A market declined again as bid volume fell 17 per cent. This is largely a result of a drop in domestic activity as the level of cross-border Eurozone activity increased significantly.